Cavalcade of Risk #120: Risk/Aversion edition

Jason Shafrin presents a unique and wonderful Cavalcade of Risk. There's a set of posts for risk-takers, and another one for those of us who are a bit more risk-averse.

Either way, there's zero risk of disappointment.

But [gasp] that's . . . that's . . . that's . . . What IS that?

Research published this month in Health Affairs notes that women consume significantly more medical care than men.

“Except for children, total spending for and by females was greater than that for and by males, for most services and payers.”

Cheese, wouldn't that, you know, mean that medical insurance premiums should be higher for women?

No, silly - because that wouldn't be faaaairrr. It would be discrimination. And that's wrong. Isn't that right?

Who knew?

Georgia Docs Leave Medicare

Medicare. Don't leave home without it. But finding a Georgia doctor to treat you might be a real challenge. The problem?

Medicare pays docs less than private insurance, less than private pay (those who do not have health insurance). Only Medicaid pays less than Medicare which means those on Medicaid and Medicare, dual eligibles, are in real trouble.

The Atlanta Journal Constitution is reporting how some Georgia doctors are going to just say no to Medicare patients.

The instability of the system has already prompted some doctors to leave Medicare and has more thinking about it, just as the first wave of the gigantic baby boom generation begins to engulf the program. Without a fix, experts said, more elderly Americans will have a hard time getting an appointment with the doctor of their choice.

"Medicare is a mess right now," said Dr. Tom Bat, who practices with a group of physicians at North Atlanta Primary Care.

It is bad now and only going to get worse going forward.

Make no mistake, future cuts in Medicare will be made in order to fund Obamacare. Seniors will be sacrificed on the altar of budget cuts in order to provide health insurance for others.

Under any other name, this is robbing Peter to pay Paul.

Medicare pays about 80 percent of what private insurance pays, according to government reports. Currently, physicians in Atlanta get $67 for a typical office visit for a Medicare patient.

While Medicare payments for doctors have remained nearly flat for the past decade, the cost of running a medical practice has gone up by more than 20 percent, according to estimates by the American Medical Association.

This is a real problem that isn't going away.

"Rather than fixing it, the politicians just postpone the problem and each time that they do that, there is more uncertainly for the physicians and other providers," said Dr. Harry S. Strothers III, president of the Georgia Academy of Family Physicians

Strothers said it's common after speaking engagements for people to approach him seeking help finding a doctor, including several just last week. "Two had just retired and found out the doctor they have been seeing for years didn't take Medicare," he said.

My mother in law had the same issue 15 years ago, so this is not a new problem.

You may have trouble finding a Medicare doctor in Georgia but finding the lowest Medicare supplement rates is easy if you do your homework. Seek advice from a local agent familiar with all the Medigap plans in your area.

Grand Rounds is up...

Dr John Mandrola makes his Grand Rounds hosting debut, and it's a beaut! Check it out for the great posts, and enjoy the beautiful pics.

The Commonwealth vs ObamaCare©: What's it mean?

As I'm sure our readers already know, a federal judge in Virginia has ruled the (Evil) Individual Mandate unconstitutional. There are a lot of legal eagles already dissecting the various legal implications, but I'd like to share some thoughts about the ruling from the perspective of risk management. Of course, these are not incompatible, so please pardon my use of some legalistic terminology in this analysis.

Let's start with this: if one presumes (as I do) that the true goal of ObamaCare© is to destroy the health insurance system that over 85% of us currently enjoy, then this ruling is a boon to those who favor it. Since the judge has ruled that the precept of "severability" does not attach, then we are left with a system that will require insurers to ignore pre-existing conditions while driving away healthy folks who would represent a "cushion" against increased claims. As insurers face more expensive and frequent claims from those who are ill, premiums will escalate even faster than they already do, driving away healthy folks who know that, if and/or when they get sick, coverage will be readily and immediately available. What possible reason would they have to remain insured?

Of course, since we already know that this is the desired outcome of those who favor ObamaCare©, it makes perfect sense: once enough people leave the system, and premiums increase beyond our wildest imagination, the government will have little choice but to step in. Whether that's through price controls or simply moving everyone to a nationalized scheme, the result will be an insurance system far different than what we have now. The problem, of course, is that "different" doesn't necessarily mean "better;" as we've seen from (for example) the MVNHS©, such a system does little beyond rationing to rein in increased health care costs, while subjecting its victims, er, insureds to lengthy waits and poorer outcomes.

Obviously, Judge Hudson's ruling is merely a stepping stone; there are still approximately 4.8 million other lawsuits currently wending their way through the judicial system. I do appreciate that at least one jurist has "seen the light" regarding the Evil Mandate, but I'm less sanguine that this represents a meaningful step forward. Still, it's preferable to a ruling approving the mandate.

Absent imposition of severability, I give it a B-.

Oh Baby, Baby!

The LA Times has this breathtaking lede:

"Before Joanna Joshua and Kyle Winning started a family, they hunted for health insurance to cover the increasingly high cost of having a baby."

Let's reword this, shall we?

"Before Joanna Joshua and Kyle intentionally burned down their house, they hunted for homeowners' insurance to cover the increasingly high cost of rebuilding it."

There, isn't that better?

Of course, both circumstances are silly, but they underscore the principle of risk. Being pregnant is not a disease, and it is easily avoided (we'll leave rape out of the equation, since that is, in fact, an unforeseeable risk). Insurance companies know this, and know that the utilization rate for maternity riders approaches 100%. That's not risk, that's cost-shifting. So to the extent that such riders are available at all, carriers price and configure them to essentially refund (at best) the premium paid.

Here's where it gets dicey, though:

"The dearth of choices forces many would-be mothers into government insurance programs paid for by taxpayers ... All of this drives up costs for hospitals, insurers and consumers buying individual policies."

It's a heads-I-win-tails-you-lose proposition: folks see no problem with mandating birth control, and also want coverage for having a baby. Neither of these pass the test of "medical necessity," and both of them drive up health care costs for everyone. The result? Even more uninsured:

"The industry's trade group, the Assn. of California Life and Health Insurance Cos., pointed to a study that found the most recent maternity bill in Sacramento would drive up insurance rates as much as 28%, and would prompt more than 9,000 mostly young policyholders to give up their insurance."

But don't we want more people to be insured, not less?

Aetna Will Probably Abandon the Individual Major Medical Market

Aetna has made another stupid move that will most likely cause them to abandon the individual major medical market in the next 18 months. Always a pain in the butt to deal with and customer service that is really cuss-tomer service.

Their latest move will put their very small block of individual major medical business into a death spiral.

Obamacare is taking its' toll on the individual health insurance market, leading to fewer choices and higher premiums. Parent's looking for children's health insurance have almost no options except to add them on as a dependent to their own plan.

Obamacrap has also killed the maternity benefit as an option in Georgia.

Last week Aetna sent a notice to agents that compensation will be cut drastically. New business comp is half what it was before. As if that wasn't enough, they also are cutting existing comp on in force renewal business by 70%.

The result will be agents will be forced to abandon Aetna as a resource for new business (no big loss there) and will move as many healthy clients as possible to new health insurance companies leaving Aetna with only the sick people.

Aetna's block of business will deteriorate to the point that premiums will be insufficient to cover claims, leading to larger and larger rate increases going forward. The policyholder's left behind will be held captive with no place to go and few options. Either they will have to pay the higher premium or drop coverage and go without for at least 6 months until they can get into Obama's PCIP program.

This is just another stupid carrier trick.